3 min read Total nonfarm payroll employment rose by 175K in April, missing expectations by 68K, while the unemployment rate increased 0.10% to 3.9%. Over half of the total gain in payrolls were in the Health and Private Education industry, perhaps a signal of weaker hiring across the broader economy than the headline number would suggest. The…
3 min readPowell At May FOMC Meeting: Not As Hawkish As Expected The FOMC met yesterday and kept the overnight lending rate unchanged for the 6th consecutive meeting at the 5.25%-to-5.50% range. Their statement acknowledged the recent increase in inflation data by adding “In recent months, there has been a lack of further progress toward the Committee’s…
3 min readHotter than expected inflation readings continued in March as headline CPI increased 3.5% year-over-year, 0.3% higher than the yearly increase seen in February, and 0.1% above expectations. Core inflation increased 3.8% year-over-year, in-line with last month’s reading, but also 0.1% above expectations. Energy and shelter prices contributed over 60% of the yearly headline increase. While…
4 min readQ1 2024 Performance: Risk Assets Outperform The first quarter of 2024 saw everything from stocks, gold and even Bitcoin rise to record highs as it becomes increasingly likely that the Fed will be able to achieve a soft landing for the U.S. economy. Treasury yields were mixed during the first quarter with 1-month to 6-month…
3 min readStable Guidance Amid Inflation’s Bumpy Road Yesterday, the Federal Reserve left the Fed Funds Target Range unchanged at 5.25% – 5.50%. The Committee’s statement was largely unchanged from January, noting solid economic expansion, strong job gains, and low unemployment. The Fed published their updated Summary of Economic (SEP), which did not significantly change, except for…
3 min readPowell: “Not Far” From Rate Cuts In Fed Chair Powell’s semiannual testimony before Congress, he suggested the FOMC is getting closer to cutting rates by saying “We’re waiting to become more confident that inflation is moving sustainably at 2%,”…..“When we do get that confidence — and we’re not far from it — it’ll be appropriate…
3 min readAnother Record Month for the Corporate Bond Market The investment-grade corporate bond market hit a record for new issuance for a second straight month in February. Blue-chip companies sold a February record of $195+ billion of bonds last month, topping the previous February 2023 record of $150.9 billion. Approximately $50 billion of bonds were sold…
7 min readFollowing pandemic-era supply chain disruptions, bottlenecks have become a top-of-mind subject for investors. At the center of the Fed’s tightening cycle was the soft landing—the idea that tighter financial conditions would help bring supply-and-demand into better balance, ease bottlenecks, and bring inflation toward 2% without significantly impacting growth. When last December’s Summary of Economic Projections…
4 min readEconomic Data Supports Feds Delayed Rate Cuts Data released this month supports the patient tone regarding rate cuts that both Fed Chair Powell and other Fed members have been conveying so far this quarter. Stronger inflation and labor market data has led to a recent surge in rates, with the 2-year yield rising 18 basis…
3 min readLabor Market Steady with Signs of Slowing The December employment report was mixed: although non-farm payrolls came in higher than expectations at 216,000, there were 845,000 people who left the labor force, the largest drop in the labor force participation rate since January 2021. For 2023, there were a total of 2.697 million jobs created…